Islamic Investment Company of the Gulf (Bahamas) Ltd v Symphony Gems NV

Under the Civil Procedure Rules 1998, r 3.1(7) confers a broad power to vary or revoke an order, subject to principled limits reflecting finality, the avoidance of repeated attempts and the appellate structure. The usual grounds are a material change of circumstances or a material misstatement of the facts, but the guidance is not exhaustive. A civil court is extremely slow to set aside an order because of a lawyer’s misconduct. Truly exceptional misconduct, particularly prolonged fraud by an officer of the court, may justify relief where it probably affected the order. An appellate court should not reopen detailed findings of fact absent an error of law.

The claimant obtained summary judgment against the second defendant following the first defendant’s default under a finance agreement. Enforcement proceedings continued for many years. The second defendant’s solicitor later perpetrated a prolonged fraud, including fabricating court orders and judgments.

The second defendant applied under the Civil Procedure Rules 1998 to set aside orders made since 2007. Hamblen J, in the Commercial Court, set aside orders made on 4 October 2010 but declined to set aside earlier orders: [2014] EWHC 3777 (Comm). The claimant challenged the orders set aside, while the second defendant sought to extend the relief to earlier orders. The central issue was whether the solicitor’s misconduct justified relief under rule 3.1(7), and which orders had probably been affected.

Both applications for permission to appeal were refused.

1. The claimant’s challenge failed. The guidance in Tibbles v SIG Plc [2012] EWCA Civ 518 was expressly non-exhaustive. The power under rule 3.1(7) is broad, but its exercise is curtailed by finality, the avoidance of allowing litigants a second attempt and the need not to undermine the appellate process.
2. A civil court must be extremely slow to set aside an order because of misconduct by a party’s lawyers. However, the solicitor’s prolonged and disgraceful fraud was wholly exceptional. It justified setting aside the orders of 4 October 2010 because, on the balance of probabilities, proper conduct would probably have led to a different order. A good arguable case or prima facie case was not the applicable standard.
3. The second defendant failed to show that earlier orders were affected. Hamblen J had found that the same order would have been made despite the solicitor’s criticisms during 2009, and that the underlying contempt pre-dated those criticisms. Rule 3.1(7) relief must be directed to the particular order affected; misconduct during an earlier period is insufficient if the challenged order would probably have been made in any event.
4. The Court of Appeal would not second-guess the Commercial Court’s detailed findings on the correspondence and evidence. Reopening such findings was inappropriate absent an error of law. The claimant could make a fresh application for orders replacing those set aside.

• Court of Appeal (Civil Division) — Both applications for permission to appeal were refused. [2016] EWCA Civ 636.
• High Court, Queen’s Bench Division, Commercial Court — Hamblen J set aside the orders made on 4 October 2010 but declined to set aside earlier orders. [2014] EWHC 3777 (Comm).